In closely watched speech, Warsh signals Fed may need to raise rates

In closely watched speech, Warsh signals Fed may need to raise rates

Any move to increase borrowing costs in September will likely invoke the frustration of President Donald Trump.

By Victoria Guida, Politico

Federal Reserve Chair Kevin Warsh on Friday laid the groundwork for a possible interest rate hike in the coming months, arguing that the economy is strong and the labor market is at full employment, while inflation is concerning.

“Inflation is running above our 2 percent target. So the Fed’s predominant focus right now should be on prices,” Warsh said in remarks at the Fed’s annual conference in Grand Teton National Park. While inflation numbers have recently been better than expected, “they do not tell me that underlying trends have meaningfully improved.”

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